It would be nice to have a full, or somewhat full OS. Maybe I'm being bitter, but once the initial afterglow wore off after buying the iPad, I started wishing that it had all the apps a Windows PC has. How many different ways do you need to view BBC? How many apps do I need to find a new restaurant? The glory of the iPad isn't in the OS, its the form factor (unless you are a computer novice). With many of us, if you give us an iPad "shell" on an open/existing platform, we can all of what the iPad can do and much more. Just sayin'
Oh, I too want an iPad to be able to do 90% of the things my desktop does, but you have to find the right balance between speed, usability and battery life. The "Instant On" and 10 hour battery life are a huge reason the iPad is and will continue to be successful, and having a full desktop OS would hurt all of those things tremendously. The iPad OS lacks a lot of things I wish it had, but hopefully with Jailbreaking and the release of OS 4.0 I can cut that list down quite a bit.
A slimmed down version of Windows 7 with a revamped GUI designed specifically for touch would be on the right track... but one place I do agree with Steve Jobs about is that this device creates an entirely new product category, it is finally the UMPC's (Ultra-Mobile Portable Computers) that were were promised half a decade ago.
Think the Microsoft Alexandria and Origami...
[ame=http://www.youtube.com/watch?v=IS4qlYwTdnk]YouTube - Microsoft Alexandria[/ame]
[ame=http://www.youtube.com/watch?v=lVLhvn4cvnQ]YouTube - UMPC, Ultra-Mobile PC - Microsoft Origami[/ame]